The $100 Million Car Crash

11.29.09 11:43 AM ET

Quinn Rooney / Getty Images

Tiger Woods is a money machine, and while many fans might think he earns most of his money by winning golf tournaments, it’s his outside commercial endorsements and ventures that bring in 90 percent of all his money. He’s made an estimated $1 billion in endorsements in his 13-year career, the most of any athlete ever, far eclipsing Michael Jordan’s athlete-as-mega-business model of the 1990s; Sports Illustrated estimates he’s now bringing in almost $100 million a year pitching products.

What this all means: Tiger Woods is not dealing just with medical recovery, marital strife, and legal headaches following his car crash early Friday morning. Enormous financial issues are at stake.

Even if Tiger takes a 10 percent hit on his endorsement income going forward, that’s $10 million a year, or $100 million over the next decade. A very expensive domestic incident.

Tiger Woods has become the $100 million-a-year man not only by consistently winning major championship titles, but also translating that into a winning image off the court. He was one of the most recognized faces on the planet, without a whiff of scandal in his wake. No steroid accusations, tabloid pictures of late night partying, strippers filing paternity suits, police reports, or any of the other issues that have turned many famous athletes into endorsement pariahs. The worst thing that’s been said about him is that he needs to better control his often-petulant temper on the golf course—a trait that his boosters have pointed to as part and parcel of being supremely competitive.

Unless the story turns out to be far more sordid than what is hinted at now, it appears Tiger is safe on his deals with Accenture, a global management, consulting, and technology-services firm that sponsors him. Ditto, his arrangement with the EA videogame series, Tiger Woods PGA Tour. It’s a top seller, and buyers are unlikely to be swayed by whether or not he was cheating on his wife.

The same is true for Tiger Woods Design, which Forbes estimates contributes about $10 million annually to his income. In this company, Tiger lends his name to farflung projects—general golf-course developments—under construction from Dubai to North Carolina. A course in Mexico is expected to begin construction in a few months.

However, some of his largest endorsements—brands with more mainstream images—could be threatened if Tiger dithers and the personal story gains a tawdry steam. With a large pool of athletes to choose from, large companies are extremely reticent to tie their products to anything with the whiff of scandal.

His biggest moneymaker is Nike. Tiger wears Nike clothing from head to toe, and with the exception of his putter, uses only Nike clubs and balls. Sales of golf equipment to wannabe Tiger duffers is an enormous business for Nike. Woods signed a new multiyear deal with Nike in December 2006, and though the terms were not released, his five-year deal in 2001 was widely reported to be worth $100 million. Another company susceptible to changing public opinions about a celebrity endorser is Gatorade. In March 2008, Gatorade introduced Gatorade Tiger, Woods’ first licensing agreement and his first deal with any beverage company. Golfweek reported that the deal was for five years and could pay Woods as much as $100 million. Woods even picked out the flavors himself: cherry blend, citrus blend, and grape.

Another potential problem for Tiger is Gillette. In 2007, along with soccer star Thierry Henry and tennis player Roger Federer, Tiger signed with Gillette as part of their "Champions" campaign. The deal was estimated to be worth upward of $20 million. And when GM ended its $7 million deal with Tiger earlier this year, which earned them a spot on his golf bag, the empty place was picked up by AT&T for an undisclosed amount, but rumored to be nearly $10 million a year.

Some damage has already been done, and when you’re dealing with stratospheric numbers like Tiger Woods, that’s a lot of money. Even if Tiger takes a 10 percent hit on his endorsement income going forward, that’s $10 million a year, or $100 million over the next decade. A very expensive domestic incident.

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The next few days will be critical in seeing if it gets worse. Where was he going at 2:25 a.m.? Why couldn't he drive his SUV around the same fire hydrant and tree he's avoided hundreds of times during the years he’s lived in that Florida compound? Did Tiger’s wife, Elin Nordegren, smash the rear window of his Escalade in a frenzied effort to get her husband out of the wreck, or was she chasing him with the club and smashed the window in a furious rage over published reports of an extramarital affair. Was Tiger taking prescription drugs? (Depending on the type of medication, under Florida law, Tiger could be exposed to charges under the state’s DUI statute, which outlaws driving while impaired by not only prescription medications, but even some over-the-counter meds.) If so, which prescription pills was he on? Any psychotropic drugs could be a body blow for the superstar whose charm is in large part his easy, all-American, trouble-free persona.

The longer Tiger waits to explain what happens, the more the tabloid fodder will grow. When Kobe Bryant was charged with sexual assault in 2003, he quickly held a press conference in which he admitted his infidelity. It was a key moment in which Bryant leveled with his fans and his sponsors. Tiger has to make the same decision, and fast. His statement posted late Sunday on tigerwoods.com only scratched the surface. While admitting the accident was “embarrassing” and saying “I’m human and I’m not perfect,” he also summarily dismissed the many rumors as “false, unfounded, and malicious.” Tiger wasn’t more forthcoming, instead saying “I deserve some privacy.” His corporate sponsors might not agree. Honesty, although painful, is the only option to insure his trademark stays strong.

Gerald Posner is The Daily Beast's chief investigative reporter. He's the award-winning author of 10 investigative nonfiction bestsellers, on topics ranging from political assassinations, to Nazi war criminals, to 9/11, to terrorism. His latest book, Miami Babylon: Crime, Wealth and Power—A Dispatch from the Beach, was published in October. He lives in Miami Beach with his wife, the author Trisha Posner.